Microsoft Makes Changes to Corporate Governance Policies

July 26, 2004
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REDMOND, Wash., July 26, 2004 — As part of a continuing effort to improve its system of corporate governance, the Microsoft Board of Directors recently revised the company’s Corporate Governance Guidelines and the charters of each of the board’s five committees. Changes include creation of the position of lead independent director, inclusion of corporate citizenship oversight as a board-level activity, adoption of provisions to comply with the corporate governance policies contained in both the NASDAQ and the New York Stock Exchange listing standards, and various other enhancements.

In an era of growing focus on corporate governance and transparency, Microsoft executives say it’s especially critical that shareholders, employees and other stakeholders understand how seriously the company takes corporate governance.

“It has always been our desire to make sure our management practices and business efforts align with the interests of our stakeholders, be they shareholders or employees,” said John Seethoff, Microsoft deputy general counsel, Finance & Operations. “We consider these changes to our corporate governance policies to be both good citizenship and good business. We will continue to evaluate our governance policies and revise them to bolster what we believe is an already strong corporate governance platform.”

Under the revised policies, the Microsoft Board of Directors formally established the role of a lead independent director who will provide input on meeting agendas on behalf of non-management directors, call and chair meetings of the non-management directors, and conduct the annual review of the Chief Executive Officer.

The Microsoft Board has 10 members, of whom eight are non-management directors who serve on the Board’s five committees. More about Microsoft’s Board of Directors, its committees and the company’s corporate governance policies is available at http://www.microsoft.com/msft/corpinfo.mspx .